Cleft palate represents one of the major groups of congenital birth defects in the human population. Despite recent advancements in medical intervention, babies born with cleft palate often suffer multiple handicaps that significantly compromise the quality of their lives. Cranial neural crest (CNC) is an important population of multipotent embryonic progenitor cells, which ultimately contribute to a diverse array of differentiated craniofacial tissues, including the palatal mesenchyme, and plays an integral role during palatogenesis. An understanding of the manner in which CNC cells contribute to palatal development and the molecular mechanism, which regulates the fate of CNC are critical for understanding normal craniofacial development as well as CNC-related congenital malformations. Multiple growth and transcription factors have been identified as critical regulators for palatogenesis. Specifically, TGF-beta plays a pivotal role in regulating the fate of medial edge epithelium during palatal fusion. It is not well understood, however, what is the functional significance of TGF-beta signaling in regulating the fate of CNC derived palatal mesenchyme. To address this issue, we have generated an animal model with conditional TGF-beta type II receptor (TGF-beta IIRfl/fl;Wnt1-Cre) gene ablation in neural crest cells. These TGF-beta IIRfl/fl;Wnt1-Cre mice show cleft palate and other craniofacial defects with 100 percent phenotype penetrance. Significantly, there is normal CNC migration into the first branchial arch of TGF-beta IIRfl/fl;Wnt1-Cre embryos, indicating that disruption of TGF-( signaling does not adversely affect CNC migration. Therefore, TGF-beta-mediated gene expression is specifically required locally during palatal development. Taking advantage of our TGF-beta IIRfl/fl;Wnt1-Cre and other mutant animal models we design studies to investigate the hierarchy of TGF-beta signaling in regulating the fate of CNC cells during palatogenesis by testing the hypothesis that TGF-beta signaling regulates the expression of homeobox gene Msx1, which in turn controls the progression of cell cycle to regulate the fate of CNC-derived palatal mesenchymal cells during palatogenesis. Ultimately, this study will provide a better understanding on how the TGF-beta signaling cascade regulates the fate of CNC cells during normal craniofacial development and how signaling disruption can lead to craniofacial malformations.